House Approves FY 2013 Continuing Resolution; Senate Likely to Approve

Published: March 07, 2013

CONGRESSForecasts and SpendingOMBPolicy and LegislationSequestration

Some said it couldn’t be done, but there’s anecdotal evidence that Congressional bipartisanship exists. On March 6 the House passed a Continuing Resolution bill (H.R. 933) that would fund the government through the rest of FY 2013, and according to the Washington Post , there is optimism that the measure will pass in the Senate (with some amendments). The good news is that we may be avoiding yet another drama-filled “fiscal cliff” scenario. The bad news is that this version of the CR does not eliminate sequestration.

Most of the funding is subject to sequestration, which brings the total discretionary budget down to $982 billion. Although the CR sets budgets for civilian agencies at the FY 2012 levels, it specifies funding levels for the Department of Defense and Department of Veteran’s Affairs, providing some cover by mitigating the impact of sequestration on critical areas of national security. According to the House Committee on Appropriations, several of these specifically-funded areas within DoD and VA will be exempt from sequestration (see chart below):
Source: House Committee on Appropriations
The bill also allows DoD to transfer $4 billion in working capital funds to support high priority military functions (except construction).
There were other provisions intended to mitigate the impact of sequestration for some civilian agencies active in national security, homeland security, emergency response and law enforcement, including funding to protect:
·        Nuclear weapons modernization for continued safety, security and reliability of our nuclear stockpile
·        Staffing at Customs and Border Protection
·        Staffing, cybersecurity and surveillance at the FBI
·        Embassy security
·        Wildfire suppression funding for Department of Interior
·        New weather satellites to support weather warnings and forecasts
H.R. 933 also includes some effort to protect state funding by establishing amounts for advance Q1 FY 2014 grant payments, such as:
·        Department of Labor, Office of Workers Compensation Programs, Special Benefits for Disable Coal Miners - $40M
·        Health and Human Services, CMS Medicaid grants to states - $106B
·        Health and Human Services, Administration for Children and Families, Payments to States for Child Support Enforcement andFamily Support Programs’ to states - $1.1B
·        Health and Human Services, Administration for Children and Families, Payments for Foster Care and Permanency to states - $2.2B
·        Social Security Administration, Supplemental Security Income Program’ - $19.3B
There will be quite a bit of reporting going on as well. Within 30 days of enactment, civilian agencies (this excludes VA) must submit spending plans at the Program, Project and Activity (PPA) level for FY 2013 to the House and Senate Appropriations Committees. One thing I did not see (either because it’s simply not there or reader error (legislation is not the easiest thing to read) is a clear definition of PPA. Starting May 1, 2013, OMB must submit monthly reports detailing all obligations incurred by civilian agencies (excludes VA), by account and with comparisons to FY 2012, to the House and Senate appropriations committees.
This measure must still pass the Senate but indications are that, although the Obama administration and Democrats are not over the moon about the bill, they will likely support it. But like a twisted version of Pavlov’s dogs, I think agencies and contractors alike have been trained to think the worst until the signature is on the page.